Preparing to Regulate AI in Insurance
Artificial intelligence (AI) has the potential to transform the insurance industry. The National Association of Insurance Commissioners (NAIC) recently formed the Artificial Intelligence (EX) Working Group to examine appropriate ways to regulate this rapidly developing technology. A key concern facing regulators is the ability to evaluate AI-based underwriting models over time after the model is approved by regulators. Without proper regulatory scrutiny, AI could engage in unfair discrimination or fail to protect a customer’s data privacy. Consumers may also have no means to dispute decisions, such as claims denials.
The AI working group published a draftPrinciples on Artificial Intelligence at the NAIC 2019 Fall National Meeting and is currently soliciting feedback on the draft principles. The working group hopes to present a revised draft for the 2020 Spring National Meeting in March.